SAR needs to capitalize on super-connector role

The Belt and Road Forum for International Cooperation held from May 14 to 15 in Beijing gathered more than 1,500 representatives from 130 countries, including 29 heads of state or government. The six parallel panel discussions focusing on policy coordination and connection of development strategies, connectivity, economic and trade cooperation, investment and financing system, people-to-people bonds and think-tank communication, have facilitated 32 bilateral or multilateral collaborative documents and projects, involving 18 nations and eight international organizations. According to a joint communique released afterwards, more than 270 deliverables were achieved.

What a success! During the forum, President Xi Jinping pledged an additional 100 billion yuan ($14.51 billion) for the Silk Road Fund, and announced provision of more than 700 billion yuan of funding or loans in various forms. This has shown the central government's determination in developing the Belt and Road Initiative into a first-class international cooperation project that will link up political, economic and cultural collaboration among a majority of nations in the world.

I was fortunate to be included in the Hong Kong Special Administrative Region delegation of more than 30 people at the forum, in which I have witnessed that Hong Kong's importance as a super-connector has been recognized not only by the central government but also by many foreign countries. As pointed out by Chief Executive Leung Chun-ying, Hong Kong has been given so many advantages that we are able to push forward connections to all countries along the Belt and Road in capital, infrastructure, policy, people-to-people bonds and trading - the "five links" covered by the initiative.

In respect of capital, infrastructure and trading, as an international city and open economy in China, Hong Kong is in the dominant position in such fields as finance, trading, professional service, infrastructure construction and management. Therefore, Hong Kong's experience in large-scale infrastructure financing and management, such as the "railway plus property" model mentioned by the CE, can be shared and learned by others.

As for political and people-to-people connections, Hong Kong's superiority lies in "One Country, Two Systems". Because of ideological differences, some economies that practice capitalism might be somehow hostile toward the Chinese mainland's initiative. By showcasing the successful win-win development of the mainland and Hong Kong, under two different systems, Hong Kong can act as a super-connector to motivate other capitalist countries or economies and make them more enthusiastic about the Belt and Road Initiative.

Undoubtedly, Hong Kong has many advantages in participating in the Belt and Road Initiative. The question is how can we make the best use of them? In the summing-up meeting of the Hong Kong delegation, representatives from the business sector, me included, had made some suggestions to the SAR government, in the hope of generating bigger room for Hong Kong companies to expand operations.

First, the SAR should strive to join the free trade agreements (FTAs) between the mainland and other countries. Hong Kong is a free port which means no trade barriers or tariffs are imposed on import-export products. This is a strong point that has more or less ensured Hong Kong enjoys the best environment for business for decades. But this also suggests Hong Kong has not much to offer when negotiating FTAs with other economies. If the central government can include Hong Kong in its FTA negotiations, Hong Kong will enjoy preferential treatments while being spared from those lengthy and costly procedures.

Second, the government should provide more resources to Hong Kong companies that are interested in investing in economies along Belt and Road. The Hong Kong Trade Development Council should conduct research, surveys and analyses and set up a database of those nations to help Hong Kong investors tap into those markets. The government should also encourage the promotion of Hong Kong brands and products, by facilitating exhibitions like the Hong Kong Brands and Products Expo to be held in more markets.

Third, since many small- and medium-sized enterprises (SMEs) are facing rigorous requirements in bank borrowing, their outward expansions are constrained to a certain extent. The regulatory authorities should consider relaxing restrictions on bank loans to SMEs, giving them bigger room to expand operations.

(HK Edition 05/22/2017 page8)